Monday, 17 September 2018
Customs Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018, Customs Tariff Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Implementation) Bill 2018; Second Reading
I rise to speak on the Customs Amendment (Comprehensive and Progressive Agreement for TPP Implementation) Bill, which has the effect of implementing the comprehensive and progressive agreement for the Trans-Pacific Partnership, the TPP-11, trade agreement. This is the third occasion I've had cause to speak on the TPP-11 agreement, as I spoke on the presentation of the Joint Standing Committee on Treaties report No. 181 and, recently, on a private members' motion on this issue.
Labor supports this bill. However, the TPP-11 trade agreement is not an agreement that Labor would negotiate in government. There are serious concerns within the agreement. Those concerns have been expressed in submissions to the Joint Standing Committee on Treaties during its recent inquiry into the TPP-11. Labor members of JSCOT prepared substantial additional comments for the publication of report No. 181 of the committee. Labour understand that, on balance, liberalisation of trade benefits Australia as a trading nation. Labor has a strong and proud commitment to growing the economy through reforms on how to do trade and how to undertake business.
However, Labor's commitment to trade liberalisation is not unconditional. Labor's commitment recognises that there are winners and losers from trade liberalisation. Whilst the market reforms undertaken in the main by the Hawke and Keating governments led to significant growth within the Australian economy and the creation of significant employment, there are communities, there are industries and there are lives adversely affected by changes to the way that we address trade between nations. I've mentioned previously in this place, in connection with the presentation of the report of JSCOT, that my electorate of Bass was one of the first areas affected by the removal of tariffs in the 1970s. The immediate effect of this was massive job losses within the textile manufacturing industry centred on Launceston. It is irresponsible to overlook the fact that in this instance there were generational consequences through job losses that have not been adequately addressed in over 40 years.
As I've indicated previously, the first step in the negotiation of treaties is to ensure that the effects of treaty action are properly and adequately modelled. There were significant concerns expressed through the inquiry process as to the lack of financial modelling associated with the TPP-11. This criticism is valid. Whilst the present government might be prepared to embark upon the negotiation of trade agreements on the basis that benefits are assumed, it is vitally important that the effects of a trade agreement are properly understood so the benefits and indeed the adverse effects can be addressed. This is consistent with longstanding Labor policy. Labor also proposes that there be analysis as to the effects of trade agreements: not only economic effects but also other areas—that is, social, environmental and, indeed, strategic. These effects should be taken into account during the negotiation of trade agreements as part of a transparent process which involves greater oversight by the Joint Standing Committee on Treaties. There should also be the ability for members of civil society to receive consultation during that negotiation process.
Whilst economic modelling in this case has been undertaken by the Victorian Labor government which shows that there is indeed a net positive effect to the Australian economy, it is unacceptable that there was no independent modelling available to the parliament during negotiation and, subsequently, during the adoption of this treaty into law. Labor in government, if elected, will remedy this by the adoption of a comprehensive set of reforms which will be designed to ensure that the accredited organisations and interest groups will be able to receive briefings during the treaty negotiation process. JSCOT will also receive, at the commencement of the process, a statement as to the objectives of a particular treaty negotiation and regular reporting as to progress against those objectives.
This treaty contains investor-state dispute settlement clauses, ISDS—in this case, extending ISDS to Canada. Labor will not countenance, in government, the negotiation of treaties which extend ISDS clauses and give corporations the right to claim compensation from Australian governments for the legitimate exercise of Australian sovereignty. It is significant that the United States has indicated that it would not include ISDS in future treaties and, in particular, will remove ISDS from the NAFTA. The European Union has also criticised ISDS clauses as constituting an unreasonable fetter on state sovereignty.
It is reasonable to suggest that ISDS clauses do not add to the likelihood that favourable trade terms may be negotiated with another state. They expose Australia to the risk of significant litigation, significant cost and what is known as regulatory chill. Labor, if elected, will negotiate the removal of ISDS clauses from the TPP-11 agreement by the use of side letters, using the New Zealand experience as a precedent. Given that ISDS provisions are supposedly to the mutual benefit of two state parties, the removal of the Canadian ISDS provisions would be on the basis that both Canada and Australia would, by agreement, remove the clauses without further additional consideration.
Labor's concerns with the incorporation of ISDS clauses into the TPP-11 are real. There are many areas of legitimate legislative powers, such as health policy, environmental law, occupational health and safety, and the like. These are all areas where the general public would consider that government should be able to legislate without threat of litigation and claims for compensation from foreign corporations. There is no doubt in my mind that ISDS does represent an unreasonable limitation upon the sovereignty of Australia. Australia has a strong commitment to the rule of law. It does not need ISDS provisions in a trade treaty to give confidence to foreign investors that they'll not be subject to arbitrary or capricious legislation.
As I've said in this place previously, the other real concern expressed by Labor is that this agreement has the effect of waiving labour market testing with respect to six additional nations. This means that temporary migration from these six nations will be facilitated without labour market testing. Citizens of Canada, Peru, Mexico, Brunei, Malaysia and Vietnam will be able to enter under temporary skilled migration without any proper assessment of the market for these jobs for Australian workers. Australian workers have only their labour to offer. Workers have every right to be concerned that an Australian government is prepared to facilitate temporary skilled migration without proper assessment of the labour market for those jobs. There are concerns rightly expressed about the potential for exploitation of temporary skilled migration, in particular the exploitation of vulnerable overseas workers. That has recently been seen in Hobart on the site of the Royal Hobart Hospital redevelopment. Chinese workers have been left in the lurch, unpaid and exploited.
As has been said by my colleague the member for Shortland, the potential for exploitation is huge. Workers have effectively no rights because they have no bargaining power. They can be sacked and deported for no reason. If we are to have temporary migration to drive economic growth in this country—and there are times where temporary migration is absolutely necessary—it should be done properly. The employer must demonstrate that a position cannot be filled by an Australian worker at a market rate of pay and not just for the minimum rate of pay on an outdated award. The migrant, the visa holder, must be paid a market rate of pay, not a minimum rate of pay. Finally, an employer should invest in training so that an Australian can ultimately fill that job. Nowhere has the undermining of Australian jobs been more significant, in my view, than in the Australian maritime industry. Highly skilled jobs have been lost to temporary migrants without regard to labour market testing. I regard the treatment of our Australian shipping industry as a national disgrace. To not do these things is to undermine the training of future skilled workers, to undermine wages and to undermine conditions.
The second significant concern with respect to temporary migration is the system of skills recognition. Skills recognition may be appropriate within the domestic context so that, for example, a Victorian electrician may be recognised as having skills appropriate for the plying of a trade in Queensland or Tasmania. The effect of this agreement is that a Mexican, Canadian or Vietnamese electrician must be accepted as having the same standard of qualifications as an Australian electrician. There are vital issues of public safety and confidence involved in skills recognition. Those concerns have been expressed by the ETU. Given the public safety issues, the public interest is not served by a weak system of skills recognition. Just as Labor has indicated that it will renegotiate the ISDS provisions of this trade agreement should Labor win government, the shadow minister and the Labor Party have committed to negotiate side agreements with the six nations that have this labour market testing exemption to have these provisions removed.
Labor in government will also legislate to prohibit the inclusion in future trade agreements of waivers of labour market testing, prohibiting future governments from negotiating trade agreements that waive mandatory skills testing and prohibiting future governments from including ISDS clauses in trade agreements. We cannot again have a situation where a Liberal government negotiates a second-rate trade agreement and seeks to put the interests of some within our community above the interests of skilled workers—that is, Australian workers generally and Australian sovereignty. In contrast, Labor, under the member for Blaxland, proposes a comprehensive review of the negotiation of trade treaties if we are elected to government.
A future Labor government will update the parliament and the public after reach round of negotiations, where possible. It will commission economic modelling for all new trade agreements before they are signed and 10 years after ratification so that the full impacts of a trade agreement can be assessed. Labor will also introduce legislation that requires future trade agreements not to waive labour market testing for contractual service providers and not to include ISDS clauses. The legislation will also establish a system of accredited trade advisers from industry, unions and civil society groups to provide written feedback on draft trade agreement text during the negotiations. This is vitally important to ensure that there is community support for the objectives of a free trade agreement. Labor will legislate in government, if elected, to require an independent national interest assessment to be conducted on every new trade agreement, before it's signed, to examine the economic, strategic and social impact of any new trade agreement.
Finally, Labor will strengthen the role of parliament in trade negotiations by increasing the participation of the JSCOT committee. Labor will provide JSCOT with a statement of objectives for negotiation, consideration and feedback and will provide JSCOT with a briefing at the end of each round of negotiations. The concerns this side of politics has with this agreement are real. They are concerns that have been heard during the course of the consultation process and the evidence received by JSCOT.
Despite this government negotiating a second-rate agreement, there are risks, including strategic risks, with voting this agreement down. Labor, if elected, has committed to fixing the offensive aspects of this agreement. The very real concerns within the labour movement and elsewhere as to labour market testing, skills testing and ISDS provisions should be heard. The government should not have ignored those concerns. Labor, if elected, will address those concerns. We have a comprehensive plan, through the shadow minister for trade, to introduce reforms that will affect the future negotiation and implementation of trade agreements.